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Skift
11-07-2025
- Business
- Skift
Brad Gerstner on 'Trump Accounts' and the Travel Leaders He Still Calls First
Brad Gerstner's Invest America, which turned into Trump Accounts, could be a game-changer for tens of millions of American kids. Altimeter Capital CEO and travel industry veteran Brad Gerstner opened custodial investment accounts for his two sons at birth — but it was his son Lincoln's question at the kitchen table that led to a national policy. "Well this doesn't seem fair," Lincoln said. "Why do we get these and what about the other kids?" Gerstner said that was the spark for the Invest America initiative and the creation of "Trump Accounts." Under the new law, every American under age 18 will be eligible to open a tax-deferred investment account starting around July 4, 2026, and those born after December 31, 2024 will get $1,000 in government seed funding. Several corporations, including Uber, Zillow, T-Mobile, Nvidia, Salesforce, and iHeartMedia, have committed to giving $2,500 to employees' kids as a tax-free benefit. "Of course, less than 5% of kids in America currently have [investment] accounts," Gerstner told Skift. "And not surprisingly, the kids who do have the accounts are kids whose parents are pretty affluent. And so I grew up poor in Indiana, in a poor town. I have a really strong belief that there's a massive unlocked potential in the country." The Travel Industry Created Ties That Bind Early in his career, Gerstner was co-CEO of National Leisure Group, which was a major cruise seller; he led a General Catalyst investment into Orbitz; was a prominent travel angel investor, and founded Room77. These days, with his Altimeter Capital investing billions of dollars in tech companies like Nvidia, Meta, Uber and Microsoft, Gerstner is a frequent CNBC guest and co-hosts the BG2Pod with Bill Gurley. Gerstner has been interviewed on stage at past Skift Global Forums. Although the travel industry isn't currently his focus, Gerstner still has deep ties, particularly with Zillow co-founder and Expedia founder Rich Barton, and Uber CEO Dara Khosrowshahi, who is also a former Expedia CEO. "I've worked on a lot of things over the years, and my first two calls are generally to Rich Barton and Dara," Gerstner said. "You forge friendships in the travel business 25 years ago, and we support each other. No questions asked. And because we trust one another, and if we're passionate about it, then we know, we've done the work. And those guys' early support [for Invest America] was monumental." Why Silicon Valley Gets Along With Trump Gerstner said that Silicon Valley's relatively warm relationship with President Trump has little to do with politics. "I think part of the reason that Silicon Valley has had some success with this president versus [former President] Biden isn't really about the political agenda as much as it is he's a business guy, and he kind of moves at an entrepreneurial speed," Gerstner said. "And there's not a bunch of layers." A case in point: A couple of months ago, Gerstner said he told Dell Technologies CEO Michael Dell – a member of the Invest America CEO Council – that "we need to get the president on board." Dell texted Trump, who texted right back and invited them to the White House to pitch it. The White House also held an Invest America Roundtable with Gerstner and prominent supporters in early June. The Trump Accounts Name The original idea was to call them Invest America Accounts, but the name "Trump Accounts" helped the legislation ultimately become law. And the idea received bipartisan support, Gerstner said, who added that several CEO supporters of Invest America are Democrats. He had previously tried to get then-President Biden to go for the idea but it didn't get traction. Gerstner said Congress would need to "re-up" the $1,000 per child government funding in 2028, which he doesn't think will be much of an issue. "We'll see what people call them after he's [Trump's] out of office," he said. 65 Million Kids The original plan was to include children up to age 10, but Gerstner said it expanded to include all Americans under age 18 – around 65 million will be eligible, he said. Newborns born as of January 1, 2025 get automatically enrolled and funded, but older kids have to sign up. Invest America, Gerstner said, will be working to ensure that as many kids sign up as possible. For those children who have accounts, but were born before January 1, 2025, anyone — parents, family, friends, and corporations — can contribute a maximum of $5,000 annually per child. Education Secretary Linda McMahon, he said, is an enthusiastic supporter and Gerstner would like to see sign-up materials included with other documents on the first day of school. "I absolutely believe this most important thing I've done in my career," he said. "But it's like when you start business, and moment that we just got funded. All right, so now we've got to go execute our asses off and make sure it lives up to its promise." Gerstner said he's committed to making the accounts as equitable and powerful as they can be. The investment accounts are "making every kid a capitalist, making every kid a true owner in the upside of America. We need to evolve the social contract to include the 70% who currently feel left out and left behind. And I think this is a powerful way to do it."
Forbes
25-05-2025
- Business
- Forbes
Are $1,000 Trump Accounts A Good Idea?
Republicans in the House of Representatives passed the GOP 'One, Big Beautiful' budget bill which included a provision for Trump Accounts. Previously called 'MAGA Accounts Contribution Pilot Program,' in which MAGA stood for Money Account for Growth and Advancement, this provision is similar to the $5,000 Baby Bond suggested by Senator Hillary Clinton when she was running for President. The Trump Account is a tax-deferred investment account that the Treasury Department would set up automatically for each eligible child born in 2025 through 2028. They call it a savings account but it will act more like a brokerage account. The child must be a U.S. citizen at birth, have a Social Security Number, and be born to parents who both have Social Security Numbers. Parents can also contribute up to $5,000 per year into this account for their children. The assets in a Trump Account would grow tax free but would be taxed at long term capital gains rates when withdrawn if they are used for qualifying expenses. Qualifying expenses include education, first time home, and even capital for starting a business. Half of the funds can be withdrawn once the child turns 18. If the funds are not used for a qualifying expense, it would be taxed as income. After 30, all the funds can be withdrawn for any purpose. It's natural to compare this with another tax advantaged account often used for education. 529 Plans are, in many ways, far superior though it does lack one beneficial feature of the Trump Account - the Treasury sending a child $1,000 just for being born. If you use 529 funds for qualified educational expenses, you pay no tax. While long term capital gains rates are quite favorable, they're not nearly as favorable as zero percent. 529 Plans also have the nice new feature in which you can transfer funds into a Roth IRA subject to certain limits and conditions. This means that if you contribute too much to a 529 plan, there's a buffer amount you can always transfer into a Roth IRA. The lifetime limit of transfers is $35,000 - which is quite significant. Trump Accounts do include buying a first home and starting a business as qualified expenses, but you are still subject to long term capital gains tax. The House of Representatives has passed a version of the bill but the Senate has yet to take it up. We will see whether the Senate version keeps the Trump Accounts as is or if they will make adjustments. If it remains unchanged, you might as well take the free $1,000 that comes with automatic enrollment of a Trump Account but there's little reason to contribute more towards the account as the child ages. For education expenses, you're better off contributing into a 529 plan.
